This post is part of a series sponsored by PCF Insurance Services.
In part 1 of this seriesNow that we’ve covered the complexities of medical malpractice insurance for individual healthcare providers, let’s turn our attention to an equally important aspect: healthcare facility insurance.
In my role as a PCF Healthcare Practice Leader, I have seen how critical this insurance is to not only protect the physical facilities where healthcare is delivered, but also the professionals who work within those facilities. This insurance is the foundation that underpins the entire operation of healthcare facilities, from small clinics to large hospitals. This does not just reduce financial risk, it also ensures continuity of care, maintains patient confidence, and upholds standards of healthcare services.
In this part, we will go into detail about the essential coverages recommended for healthcare facilities, explain why each component is important, and how they collectively can form a shield that protects the core of the healthcare system.
Comprehensive Coverage: The Foundation of Medical Facility Insurance
In the realm of medical facility insurance, comprehensiveness is the first rule. You can’t just insure the medical facility or the medical personnel, you need to ensure that your malpractice insurance comprehensively covers both. We’ve seen cases where the facility is excluded, or where only the facility is covered but not the individual medical personnel. These gaps can leave significant vulnerabilities for all parties.
Another important aspect that is often overlooked is cyber liability insurance. Healthcare data is a prime target for cyber attacks, and the costs of a data breach in the healthcare industry can be astronomical, given stringent regulations such as HIPAA. In fact, medical records are thought to be up to nine times more valuable to hackers than other industries, highlighting the importance of strong cyber protection measures. It’s surprising how many healthcare facilities do not have adequate insurance against such cyber risks, potentially exposing them to significant financial damage.
Additionally, it is wise for medical facilities to obtain both malpractice and general liability insurance from the same insurer. This approach helps mitigate liability disputes that may arise in accidents that fall in the gray area between the two types of coverage.
Finally, management liability insurance plays a key role. This coverage is essential to protect against lawsuits that employees, vendors, and even non-employed individuals may file allegations of discrimination based on a variety of factors. If the company itself is unable to defend a lawsuit, this insurance becomes essential to defend the parties involved. Additionally, a comprehensive management liability program can protect the personal assets of directors, officers, and owners from lawsuits. This protection comes into play when the organization they own or work for is unable to indemnify or defend them due to financial constraints or the details of a particular claim.
Choosing the Right Insurance: A Guiding Hand
When choosing insurance for your medical facility, we don’t recommend going directly to an insurance company. Instead, a broker acts as a key intermediary, offering a more customized insurance solution and conducting thorough research to fit your specific needs. Additionally, brokers carry malpractice insurance, giving you an extra layer of protection against potential oversights.
The details and specifics of your insurance policy are very important. For example, we helped a physician who for many years had only insured his own facility, not as a private practitioner. This situation highlights the importance of clarifying your insurance policy to ensure comprehensive coverage.
Insurance as a risk management strategy
Insurance is not just a safety net, it is a strategic tool for managing risk and uncertainty. This is especially true for healthcare facilities where the concept of total loss cost is essential to long-term survival. Insurance allows facilities to forecast and control semi-controllable expenses in budgets and income statements. This foresight can turn potential unknown costs into known quantities, allowing for more precise financial planning and management.
In the event of a lawsuit, a strong insurance policy means your facility doesn’t have to manage the legal process on its own. Insurance companies often negotiate rates with attorneys, lowering defense costs and saving your facility time and resources. In essence, insurance relieves a significant financial and administrative burden, making for a more cost-effective and efficient process.
Next steps: Understanding the legal situation and Assembly Bill 35
As we conclude our discussion of healthcare facility insurance, it is clear that choosing the right insurance mix is crucial to the efficient functioning and potential safety of your healthcare facility. In the third installment of the series, we shift our focus to the broader legal landscape surrounding healthcare insurance. In particular, we will look at the nuances and implications of Assembly Bill 35 and how it impacts healthcare providers and healthcare facilities.
Understanding legislation like Assembly Bill 35 is essential for healthcare professionals and facility managers as it directly impacts insurance policy and practice. We will analyze what this legislation entails, its importance to the healthcare sector, and how it will impact healthcare facilities’ insurance requirements and strategies.
Please tune in for this important discussion aimed at providing clarity and guidance at the intersection of health care, insurance and the law.
Is your healthcare facility adequately secured? Connect with a PCF Healthcare Insurance Expert We can help you explore insurance options and ensure the financial security of your facility.
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